Lenders refuse to give Kingfisher NoC

A meeting between the management of Kingfisher Airlines and lenders to the company on Friday remained inconclusive. The core group of lenders, which met the airline's management at the UB Group headquarters here, declined to give a no-objection certificate to the airline.

In late October, the Directorate General of Civil Aviation (DGCA) had suspended Kingfisher Airlines' licence and urged the management to come up with a concrete revival plan. It had also advised the airline to hold discussions with various stakeholders before its licence could be renewed. The airline, which owes its lenders Rs7,500 crore, also has to pay dues of Rs250 crore to the Airports Authority of India.

It also owes dues to aircraft lessors and a host of other vendors.

The airline, going downhill since November 2011, has struggled to raise any debt or equity to revive itself.

Late last year, Kingfisher Airlines had given a revival plan to the DGCA. It had stated the UB Group would infuse Rs650 crore through the next 12 months. As no details were provided, the lenders, as well as DGCA, sought a concrete action plan.

According to norms, the airline can apply for a renewal of its licence within two years, or before 2014-end.

In addition to discussing an extra line of working capital with bankers, the UB Group management has also held talks with Etihad Airlines for equity infusion, albeit without much success.

Since it started operations in 2005, Kingfisher Airlines has never recorded profits and its net worth has eroded substantially. The airline struggled to keep its stakeholders together. The company also faced a severe backlash from its employees, many of whom have not been paid for about a year.

On Friday, the Kingfisher stock closed at close Rs14.40 on the National Stock Exchange, a fall of 2.7 per cent.